An East Hampton citizen activist group last week lodged a class action complaint against PSEG Long Island—the first step in a potential lawsuit against the utility company—for its ongoing electrical project in East Hampton and Amagansett.

Long Island Businesses For Responsible Energy (LIBFRE) and its attorney, Irving Like, have been objecting to the installation of 267 new utility poles and a 23/33-kilovolt transmission line since April, claiming the project’s proximity to residents’ homes is a threat to health and safety, a detriment to their property values, and “negligent infliction of emotional distress.”

“The project in East Hampton was undertaken to ensure the reliability of the electric grid for our customers across the entire town of East Hampton,” said PSEG spokesperson Jeffrey Weir in a phone interview, “and now that we’ve received the lawsuit, we’ll be reviewing it in more detail.”

The project was also deemed “necessary to ensure reliability of the electric system” and should be completed before summer 2014, according to the New York State Department of Public Service, which conducted a third-party review of the project and released its results in May.

In its complaint filed on Wednesday, May 28, LIBFRE said the utility poles and the transmission line have “caused serious injury and will continue to cause serious injury,” outlining the alleged dangers of the poles. The complaint states the poles contain pentachlorophenal, also known as penta, alleging that it is a “dangerous poison that causes serious injury to humans if its fumes are inhaled.” The claim is based on a report from Dermody Consulting, which LIBFRE hired in April to perform tests on the soil surrounding the poles. The tests came back positive, showing “extremely high” quantities of penta, which “leaches into the soil” and could damage drinking water, according to the complaint.

The utility company said it does not apply penta to the poles but merely purchases them from a distributor and installs them, arguing that the use of penta in poles is a common practice.

“A wood preservative expert has informed us that approximately 55 percent of the millions of utility poles in the United States have been treated with penta,” Mr. Weir said in a previous interview.

The complaint goes on to say that the poles have damaged vegetation in the area and “significantly lower the value” of 300 properties in close proximity, resulting in a decreased value “anywhere between 5 percent and 10 percent because of the new poles and lines.”

LIBRE also claims the transmission line emits electromagnetic fields “that are a danger to the health of the plaintiffs,” and that the utility company did not comply with the State Environmental Quality Review Act, given the alleged damage to wildlife and water quality.

SEQRA is a state law that requires companies to look at factors like aesthetics and public safety, and issue a “negative declaration”—which means the project will not cause damage—to legally proceed. PSEG hired AKF, a third-party company, to conduct the review, which consists of 243 environmental analyses of the project, and a negative declaration was issued.

The organization has raised nearly $30,000 “to fight this David-and-Goliath battle,” said LIBFRE’s chair and founder, Helene Forst, in an email. Ms. Forst said she believes the legal costs should be funded by the Federal Emergency Management Agency and New York State, “not the people who have been violated, whose land has been contaminated and whose lives have been injured.”

“At the town meeting that we called,” said Ms. Forst in a phone interview, “Fred Thiele stated that he believed the only way we could fight this was through litigation. And this is a very expensive endeavor, taking hundreds of hours of our time, all of us having full-time jobs. If the people of this community would band together and give $100 apiece, or whatever they could afford, we could raise funds to right this wrong.”

The project is currently at a halt after East Hampton Town issued a stop-work order against the utility company in April for failure to obtain site plan approval and a building permit for work on the substation in Amagansett.

According to Mr. Like, PSEG and LIPA, the defendants, have 20 days to respond to the complaint.

“It’s a situation where they can ask the court to dismiss the complaint by making a motion, and in the motion they’d have to set forth the legal reasons why they think the complaint should be dismissed,” said Mr. Like. “Or they can serve an answer to the complaint. And the answer usually would consist of denials of facts that they say are not true, or it might contain what we call affirmative defenses,” he said, explaining that affirmative defenses are legal reasons why the defendant says they are not liable in the case.

If PSEG and LIPA are not prepared to respond within the 20-day time frame, said Mr. Like, they can ask for an extension, and it is usually granted as a courtesy.

“We don’t know at this time whether they plan to make a motion, answer or get more time,” said Mr. Like. “We have the right within the next 20 days if we want to amend our complaint to add additional plaintiffs or to make additional claims.”